Brilliant Color is a small supplier of chemicals and equipment that are used by some photographic stores to process 35mm film. One product that Bril- liant Color supplies is BC-6. John Kubick, president of Brilliant Color, normally stocks 11, 12, or 13 cases of BC-6 each week. For each case that John sells, he receives a profit of $35. Like many photo- graphic chemicals, BC-6 has a very short shelf life, so if a case is not sold by the end of the week, John must discard it. Since each case costs John $56, he loses $56 for every case that is not sold by the end of the week. There is a probability of 0.45 of selling 11 cases, a probability of 0.35 of selling 12 cases, and a probability of 0.2 of selling 13 cases. (a) Construct a decision table for this problem. Include all conditional values and probabilities in the table. (b) What is your recommended course of action? (c) If John is able to develop BC-6 with an ingredi- ent that stabilizes it so that it no longer has to be discarded, how would this change your recom- mended course of action?
Brilliant Color is a small supplier of chemicals and equipment that are used by some photographic stores to process 35mm film. One product that Bril- liant Color supplies is BC-6. John Kubick, president of Brilliant Color, normally stocks 11, 12, or 13 cases of BC-6 each week. For each case that John sells, he receives a profit of $35. Like many photo- graphic chemicals, BC-6 has a very short shelf life, so if a case is not sold by the end of the week, John must discard it. Since each case costs John $56, he loses $56 for every case that is not sold by the end of the week. There is a probability of 0.45 of selling 11 cases, a probability of 0.35 of selling 12 cases, and a probability of 0.2 of selling 13 cases. (a) Construct a decision table for this problem. Include all conditional values and probabilities in the table. (b) What is your recommended course of action? (c) If John is able to develop BC-6 with an ingredi- ent that stabilizes it so that it no longer has to be discarded, how would this change your recom- mended course of action?
Chapter6: Systems Of Equations And Inequalities
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![**Transcription for Educational Website**
---
**Brilliant Color: Decision-Making and Inventory Management**
**Case Study: Brilliant Color**
Brilliant Color is a small supplier of chemicals and equipment used by some photographic stores to process 35mm film. A notable product offered by Brilliant Color is BC-6. John Kubick, the president of Brilliant Color, typically stocks 11, 12, or 13 cases of BC-6 each week. The profit per case sold is $35. However, BC-6 has a short shelf life, similar to many photographic chemicals. Cases that are not sold by the end of the week must be discarded. The cost per unsold case is $56.
**Sales Probability:**
- **11 cases:** Probability of 0.45
- **12 cases:** Probability of 0.35
- **13 cases:** Probability of 0.20
**Tasks:**
(a) Construct a decision table for this problem. Be sure to include all possible outcomes, conditional values, and probabilities in your table.
(b) Provide your recommended course of action.
(c) If a stabilizing ingredient for BC-6 is developed, making it unnecessary to discard unsold cases, analyze how this could alter the recommended course of action.
---
**Educational Insights:**
- **Decision Tables:** An important tool used to depict actions based on different conditions. Students will learn how to calculate potential profits and losses using given probabilities and costs.
- **Inventory Management:** Understanding the implications of perishable goods and making informed stocking decisions based on probabilistic sales forecasts.
- **Product Development:** Exploring how innovations, like a stabilizing ingredient, can transform inventory and sales strategies.
This case study exemplifies real-world business decisions, integrating probability, cost analysis, and strategic planning in inventory management.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44040561-bc3e-4c0f-83c7-6bff2be49517%2Fed15d050-a950-4226-8630-fc797d78f815%2F0ql75r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Transcription for Educational Website**
---
**Brilliant Color: Decision-Making and Inventory Management**
**Case Study: Brilliant Color**
Brilliant Color is a small supplier of chemicals and equipment used by some photographic stores to process 35mm film. A notable product offered by Brilliant Color is BC-6. John Kubick, the president of Brilliant Color, typically stocks 11, 12, or 13 cases of BC-6 each week. The profit per case sold is $35. However, BC-6 has a short shelf life, similar to many photographic chemicals. Cases that are not sold by the end of the week must be discarded. The cost per unsold case is $56.
**Sales Probability:**
- **11 cases:** Probability of 0.45
- **12 cases:** Probability of 0.35
- **13 cases:** Probability of 0.20
**Tasks:**
(a) Construct a decision table for this problem. Be sure to include all possible outcomes, conditional values, and probabilities in your table.
(b) Provide your recommended course of action.
(c) If a stabilizing ingredient for BC-6 is developed, making it unnecessary to discard unsold cases, analyze how this could alter the recommended course of action.
---
**Educational Insights:**
- **Decision Tables:** An important tool used to depict actions based on different conditions. Students will learn how to calculate potential profits and losses using given probabilities and costs.
- **Inventory Management:** Understanding the implications of perishable goods and making informed stocking decisions based on probabilistic sales forecasts.
- **Product Development:** Exploring how innovations, like a stabilizing ingredient, can transform inventory and sales strategies.
This case study exemplifies real-world business decisions, integrating probability, cost analysis, and strategic planning in inventory management.
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